Wall Street loves nothing more than hypergrowth stocks, especially if it’s profitable. Even if a company isn’t profitable today, Wall Street will eagerly assign a premium valuation if it sees massive growth potential down the road. That explains the recent enthusiasm around AI, SaaS, and data analytics stocks. Many believe these high-flying tech companies can deliver over 25% compound annual growth for the next decade, a truly rare feat. Naturally, Wall Street has rewarded them with lofty valuations.
However, there remain numerous hidden gems – hypergrowth stocks that are still depressed despite their enormous growth prospects. Even better, many are on the cusp of profitability or already expanding earnings rapidly. Once Wall Street takes notice, these stocks could deliver outsized multi-bagger returns and help you turn your $10,000 portfolio into something much bigger.
Flywire Corporation (FLYW)
I have been bullish on many fintech stocks for the past few months. The fintech sector in general hasn’t recovered much compared to the broader market. If you compare fintech software companies to other SaaS companies, the disconnect is now huge. That’s despite the fact that many of these fintech names are continuing to grow despite the damp environment caused by rate hikes and hesitant bank partnerships. I believe once rate cuts start and the situation eventually improves, these fintech names can stage a strong comeback.
Flywire Corporation (NASDAQ:FLYW) is a global payments enablement and software company. Their platform facilitates payment flows across multiple currencies, payment types, and options. This stock doesn’t trade at a bargain-basement valuation, but I believe it can still deliver multi-bagger returns from here. EPS growth is expected around 45-60% annually going forward along with revenue growth of around 30% annually. This is a very healthy growth rate, especially considering the company has $655 million in cash against just $3.6 million in debt. It’s a financially sound business, and Gurufocus estimates a $70 fair value price by the end of 2026. I’m confident in their growth prospects.
Lightspeed Commerce (LSPD)
Lightspeed Commerce (NYSE:LSPD) is an e-commerce software company based in Canada. It has robust growth that I believe can propel the stock much higher going forward. Headwinds in 2021 caused LSPD stock to plummet from $124 at its peak to around $15. The stock has been trading basically sideways for a year and a half now, but I foresee a breakout coming in the next few months as core fundamentals have been surging.
Don’t get me wrong – you’re still paying 80 times forward 2024 earnings for Lightspeed at current levels. However, if you extend your horizon to 2027, you’re only paying 10 times the estimated 2027 EPS with solid 15-20% annual revenue growth projected this decade. Again, this is a financially sound company, with $749 million in cash against only $23 million in debt. That provides confidence they can fund significant growth in the years ahead and continue expanding, ultimately driving the stock higher.
Five9 (FIVN)
Five9’s (NASDAQ:FIVN) cloud contact center platform integrates voice, messaging, AI, analytics, and workforce optimization to transform legacy on-premise infrastructure. Trading range-bound for months, I expect FIVN stock to break out in 2024.
The company continues gaining market share in its key segments, powering enterprise contact center migration to the cloud. Profitability runways support significant equity upside even from current reasonable valuations. Indeed, I see a tangible upside for Five9 if execution endures. The company recently beat Q4 earnings results, growing revenue by 15% year-over-year to $239 million and beating EPS estimates by a solid 24%.
Analysts expect Five9’s EPS to quadruple over the next eight years, along with revenue quadrupling from $1 billion to $4 billion during that timeframe as well. Thus, I view it as a solid growth stock capable of delivering multibagger returns if execution stays on track. Gurufocus estimates a $213 fair value per share by the end of 2026.
ITM Power (ITMPF)
ITM Power (OTCMKTS:ITMPF) is an energy storage and clean fuel company based in the U.K. It produces green hydrogen using electricity and water. While the core business has been burning through substantial cash, the situation is improving. Most importantly, ITM Power has $308 million in cash reserves. Meanwhile, losses have been rapidly declining – down to just $9.1 million per quarter. At the same time, revenue is projected to climb from $24 million currently to nearly $1 billion over the next eight years. Those losses will likely turn into healthy profits during that timeframe.
Thus, I am very bullish on this stock if everything goes according to plan. It could deliver phenomenal returns. However, it is an equally risky play, since Gurufocus categorizes it as a potential value trap. If execution matches expectations, though, the fair price value is estimated above $78 by the end of 2026. I see sizable upside if management executes.
JinkoSolar (JKS)
JinkoSolar (NYSE:JKS) is a major Chinese solar company that I believe has been overly punished recently. Investors have turned bearish on Chinese stocks broadly, causing indiscriminate selling pressure on companies like JinkoSolar despite relatively strong fundamentals. JinkoSolar has also faced excessive fears around tariffs and sanctions. This has led to capital fleeing the stock and its peers.
However, the reality is that JinkoSolar has expanded rapidly over the past few years, demonstrating best-in-class operations. Its valuation should be far richer given its tremendous growth. JKS stock currently trades at just 2.4 times forward earnings and 0.09 times sales, pricing in irrational fears rather than actual business performance. EPS is expected to climb from $12 today to $20 by 2027 alongside robust revenue growth. Analysts forecast JinkoSolar’s revenue to rise from $16 billion now to $26 billion by 2027 as global solar demand expands.
The primary justification for this rock-bottom valuation seems to be the company’s high debt obligations. However, I don’t believe that warrants so much bearishness. JinkoSolar has delivered tremendous earnings growth despite its leverage. Once sentiment shifts, the upside for JKS stock could be enormous given its stellar growth trajectory.
HAL Trust (HALFF)
The real estate market has been weak in many countries over the past two years due to rising rates. However, housing shortages persist and real estate growth is returning in various regions. HAL Trust (OTCMKTS:HALFF) is an investment firm primarily holding shares in other companies. It focuses on portfolio management and real estate asset development.
My bullish view stems from HAL Trust being undervalued relative to the broader asset management industry. Growth and profits are already solid. The company delivered 53% year-over-year revenue growth in its June 2023 quarter. However, its P/E ratio remains inexpensive at just 8 times earnings. The PEG ratio is 0.39, a better value than 90% of asset management peers. The price-to-sales ratio is also only 0.9, superior to 92% of industry players. I see sizable upside from current levels.
Megaport Limited (MGPPF)
Megaport Limited (OTCMKTS:MGPPF) is a software-based elastic connectivity provider. In plain terms, it gives customers the ability to easily connect their networks to other services or data centers as required. This elasticity enables efficient resource allocation, cost-savings, and agility in managing network connectivity.
I believe this niche business model can generate substantial returns if adoption takes off. Remember, we’re amid a data and cloud computing boom. It’s not a cheap stock, but I see massive growth potential. Gurufocus estimates a fair value of $18, twice the current price. It sees fair value reaching $31 by the end of 2026. I think this is a great opportunity. If Megaport lands more AI and cloud contracts, multibagger gains could materialize even at current prices.
On the date of publication, Omor Ibne Ehsan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.